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Update on laws impacting motor dealers and repairers

One new law will replace the previous the Motor Dealers Act 1974 and Motor Vehicle Repairers Act 1980.

The new law is expected to commence mid-2014, however the dispute resolution mechanism for unfair contracts and unjust conduct affecting motor dealers, commenced on 27 November 2013. This dispute resolution mechanism allows motor dealers, or an approved motor industry group, to apply to the Small Business Commissioner for help to resolve a dispute with a vehicle manufacturer or supplier about an unfair supply contract term or unjust conduct.

The new law is the Motor Dealers and Repairers Bill which was passed by NSW Parliament on Thursday, 21 November 2013 and received assent on Wednesday, 27 November 2013, becoming the Motor Dealers and Repairers Act 2013.

For more information on the role and powers of the Small Business Commissioner in the dispute resolution process can be found at www.smallbusiness.nsw.gov.au

In early 2014, stakeholders will be invited to help develop the Regulations which will accompany the new law. To register your interest in this process, send an email to policy@finance.nsw.gov.au

Fair Trading will continue to conduct free seminars for the industry across NSW in 2014.

Seminars will form part of all fifteen MyPlace Programs conducted across the State annually but will also be scheduled to assist in advising industry of the requirements of the new Motor Dealer and Repairers Act 2013.

Information regarding Fair Trading’s schedule of seminars including locations will be available early in the new year.

The NSW Government has announced a Parliamentary Inquiry into the motor vehicle repairer and insurer relationship, contracts and smash repair work in NSW.

The terms of reference for the Inquiry to examine and report on are:

Smash repair work and whether it is being carried out to adequate safety and quality standards

The current Motor Vehicle Insurance and Repair Industry Code of Conduct, its governance structure and dispute resolution mechanisms and whether it is effective at regulating the relationship between repairers and insurers and in serving consumer interests

Consumer choice, consumer protection and consumer knowledge in respect to contracts and repairs under insurance policies

The business practices of insurers and repairers, including vertical integration in the market, the transparency of those business practices and implications for consumers

Alternative models of regulation, including in other jurisdictions.

The new Legislative Assembly Select Committee that will hold the Inquiry will be chaired by the Member for Monaro, John Barilaro.

On 1 January 2014, the Consumer, Trader and Tenancy Tribunal (CTTT) was one of 22 tribunals amalgamated into the new NSW Civil and Administrative Tribunal (NCAT). Motor vehicle disputes that previously went to the CTTT are now dealt with in the Consumer and Commercial Division of NCAT.

The following case study is one example of a dispute brought to the CTTT in 2012.

The owner of a 1950’s American classic car engaged a custom vehicle restorer for a paint restoration of the vehicle. It was always understood between the parties that the vehicle was a “show car” and never road driven. The final cost of the restoration work was $39,500. The owner was unhappy with the final finish and emailed the restorer detailing a number of defects. The restorer carried out the rectification work, but the owner continued to be unhappy with the finish and lodged an application to the Tribunal for a refund of $30,000 on the grounds that the paint work was defective.

At the Tribunal hearing the applicant stated that the paint work on the vehicle was a “soft finish” which was detrimental to the longevity of the paint and meant that the vehicle could not be taken outside. He provided an expert report which concluded that the paint film build was excessive and “the vehicle does not meet a commercially acceptable industry standard refinish for this make and age of vehicle and hence requires rectification”.

The respondent agreed with the applicant’s expert evidence in relation to the finishing of standard commercial vehicles, but stated that it was not valid as it did not apply to “show vehicles”. The respondent then called three witnesses who were experts in the field of “show cars”. They each gave evidence on the difference between a commercial finish and a show finish. It was agreed by all of the witnesses that it was standard practice to use a much higher film build of between 300 and 400 microns of paint on custom show vehicles, as the softer paint allowed the vehicle to be sanded and buffed to a very high gloss show finish.

The Tribunal was satisfied that the applicant made it clear to the respondent that the purpose of the paint restoration was for a show vehicle and not a commercial vehicle, and that the vehicle was never going to be driven on the road. The Tribunal found that the applicant told the respondent he wanted a “show vehicle finish” and there was no evidence that the respondent’s work was defective. Orders were made dismissing the application.

Fair Trading Commissioner Rod Stowe has welcomed the agency’s first custodial sentence for an unlicensed motor dealer and odometer tamperer.

Yagoona man, Adam Assad, was sentenced to eight months imprisonment and ordered to pay $52,616 in fines, costs and compensation by Parramatta Local Court after four convictions under the Crimes Act and six Motor Dealers Act offences including fraud, odometer tampering and unlicensed motor dealing.

He was ordered to pay $35,766 compensation to three victims.

The Court heard Assad wound back the odometers and made a $40,766 profit on four vehicles he sold for a total of $134,000. The vehicles were all four wheel drives and SUVs.

Mr Assad carried on the business of a motor dealer without a licence, interfered with odometers, dishonestly obtained financial advantage by deception and made and used false log books.

He bought late model motor vehicles, predominantly in his own name, via motor vehicle auction houses, motor dealers and through private sales.

He transferred motor vehicle registration details into his own and other names, did registration number ‘plate swaps’ to disguise vehicles and their true history from prospective buyers and regulators and upgraded base model vehicles to appear to be original premium grade models.

He wound back odometers and supplied motor vehicle service books with false service history. He used different names, locations, accounts, mobile phones and email addresses when advertising vehicles for sale online.

He arranged for consumers to meet him at different locations to inspect vehicles. He used an associate to advertise and sell vehicles. He obtained genuine service books from unknown sources and used false stamps to create false service entries.

The Commissioner said notwithstanding a significant number of concessions granted to Mr Assad in relation to his circumstances, his lack of remorse and level of premeditation, planning and execution of fraudulent behaviour had led to the conviction.

On 2 December 2013 Mr Assad lodged an appeal against the severity of his sentence.

A rogue trader supplying the camping and caravan industry has been ordered to pay $12,020 to cover fines, costs and compensation after leaving a convoy of unhappy campers in its wake.

Bulk Imports & Exports, the registered proprietor of the business names Solar Energy Store International, Eproducts, Luxury Home Products and Chrome Campers, sold a vast array of goods which included camper trailers and dirt bikes.

On 19 November 2013, Bulk Imports & Exports pleaded guilty in Parramatta Local Court to multiple charges, including unlicensed motor vehicle dealing and failing to comply with a previous Consumer, Trader and Tenancy Tribunal (CTTT) order.

Fair Trading has successfully prosecuted a South Western Sydney man who pleaded guilty to multiple odometer tampering and fraud charges in Parramatta Local Court.

Duc Loc Nguyen was fined $8,000, sentenced to 200 hours community service and placed on a 12 month good behaviour bond for offences committed between January 2011 and March 2012.

He pleaded guilty to seven odometer tampering offences, one count of operating without a motor dealer’s licence, and three counts of fraud in relation to obtaining a financial advantage by deception through the use of fraudulent log books.

The offences were uncovered by Fair Trading investigators as part of Operation Odo conducted in early 2012.

Fair Trading had already secured cheques totalling $38,030 from Mr Nguyen as compensation to the seven consumers who had bought cars off Mr Nguyen.

Magistrate George described the defendant as “blatantly dishonest” and his conduct as "fairly cold blooded”.

The Magistrate added he was confronted by the defendant's conduct that “involved planning, careful device, (and) spending time advertising vehicles to take advantage of people”.

Mr Nguyen used various aliases, including Victor, Ken, Justin, Steven, David and James, and used multiple email addresses and mobile phone numbers to deceive potential consumers.

Mr Nguyen arranged to meet consumers in the Homebush Olympic Park precinct and surrounding suburbs, for consumers to inspect the vehicles he advertised on Carsales.com.